Maintenance fees questions

[Jilian]

I'm still new to the DVC world and am trying to better understand maintenance fees. I understand that they are a set price per point. So if I have 200 points and the maintenance fee is $5/point then I'd pay $500 that year. What if you bank or borrow points? If I borrow next year's points giving me a total of 200 points for the year will my maintenance fee go up to $1,000 for that year? If I bank all of my points for the year will my maintenance fee be $0? Or is the maintenance fee payable every year and not calculated on how many points you are actually using that year?

I had always thought that your maintenance fee would be the same each year as long as you owned the same number of points but then I came across a thread that discussed paying a higher maintenance fee for a resale that had banked points. If you buy a resale with banked points do you pay the maintenance fee on those points?

I hope that made sense!

ETA one more question: can you claim maintenance costs on your taxes? Can you claim the initial money you pay on your taxes? I need selling points to sell my DH on DVC...lol

 

[marynvince]

maintenace fees equal Rate (varies by resort) X number of points owned. Rates go up every year so maintenance fees will go up every year. Increase is variable, not to exceed 15% per year.

 

[erionm]

For a resale purchase, the seller will probably want you to repay them the annual dues they have already paid on points you are getting from them. That's between buyer and seller.

You would not start paying Disney until the next calendar year.

 

[JimMIA]

So if I have 200 points and the maintenance fee is $5/point then I'd pay $500 that year.

No, you'd pay $1,000 (200 X $5 = $1,000)

What if you bank or borrow points?

It makes absolutely no difference what you do with your points. The only correlation with points is the dues are allocated based on how many points you own...not use.

The dues are an approximation of the expected expenses of operating the resort (staff salaries, insurance, taxes, services provided, reservations, etc, etc.) for the CALENDAR year. They are billed in December and are due in January. They have NOTHING to do with Use Year or what you do with your points.

If you buy direct, Disney pro-rates the dues to the portion of the calendar year you own your contract. So if you purchase on April 1, for example, you would pay 3/4 of that year's dues.

In resales, everything is negotiable. Generally, you don't pay dues for banked points; they're just viewed as a deal sweetener. But you could -- everything is negotiable.

 

[Jilian]

D'oh, I meant to type 100 points, not 200.

 

[Jilian]

One more question: can you claim maintenance costs on your taxes? Can you claim the initial money you pay on your taxes? I need selling points to sell my DH on DVC...lol We live in FL and usually go at least twice a year and we're a family of 5 that will eventually need a room bigger than a standard hotel room (our youngest is almost 2) so I'm already sold. His holdback is that we get the FL resident and passholder discounts so he thinks they are both the same price, if we can claim anything on our taxes then the scale will tip towards DVC. Having a kitchen to make meals in helps a lot too because it saves us from getting the dining plan @ $100/day.

 

[JimMIA]

One more question: can you claim maintenance costs on your taxes?

There is a portion of your dues that is for property tax. That portion, and that portion only, is deductible.

I don't have any current tax data at my fingertips, but in the one year I have my total dues were about $2,000 and the taxes were $415. Hopefully, that will give you a ballpark figure.

It's not a big deal in terms of the actual tax savings.

 

[JimMIA]

If I were trying to sell someone on DVC, I would not use a straight financial argument. Numbers will just be larger or smaller, but they won't give you any sense of the quality of the vacation experience.

The approach I would take to SELL someone on DVC is to just try DVC.

You're going a couple of times a year anyway -- for your next trip, rent a DVC reservation from an owner. As you probably know, the DIS has a DVC Rent/Trade board and there are a number of other sites (TUG, Redweek, eBay, and others you can Google) where you can rent. You can use the DVC Points Chart link at the top of this page to determine how many points you will need and then figure $10-$13 per point for a typical rental price.

I would NOT stay at my favorite DVC resort (OKW) because the huge villas there are both the least expensive and the largest. OKW is really not representative of DVC generally for that reason, so I'd stay somewhere else...wherever you think you might like. Stay in a one-bedroom, and even if your stay is only for a few days, you'll get a sense of the difference in staying at DVC.

If you think DVC might be for you after that stay, THEN start looking at the financial aspects. I would look only at resale, but you may want to look at buying direct (much higher prices) as well.

If you like the concept, but can't make the numbers work with DVC, you should be aware that there are a world of other timeshares out there which provide VERY nice accommodations for less money...sometimes for a fraction of the cost.

For one example, go over to the DIS Orlando Hotels and Attractions board and look at some of the other options. Some of the threads there have extensive photos that will really give you a feel for those properties.

And in addition to timeshares and hotels, there are many other options -- townhome rentals, pool homes...lots of choices. Before you BUY something, look at everything you think might be good for your family.

 

[taaren]

There is a portion of your dues that is for property tax. That portion, and that portion only, is deductible.

Just to add: You can only deduct the property taxes as your "second home", so you need to own and live in your first home and not have a vacation property with more taxes that you already deduct.
For us, since we rent out the home we own and the structure we live in is owned by my family, we can't deduct anything. But as JimMIA mentioned, there's not a significant tax deduction anyway though its nice to use if you happen to be a DVC owner.